Hindustan Unilever to Demerge Ice Cream Business into Independent Listed Entity The demerger will establish the new company as a leading listed ice cream entity in India, enabling it to operate with focused management and greater strategic flexibility.

In a significant move aimed at unlocking shareholder value, the Board of Directors of Hindustan Unilever Limited (HUL) has granted in-principle approval to demerge its ice cream business into an independent listed entity. The decision, disclosed in a regulatory filing, marks a strategic shift for the company and is expected to position the new entity for enhanced growth and market focus. Under the proposed plan, shareholders of HUL will receive proportional shares in the new entity, ensuring continuity of investment in the high-growth ice cream segment. The decision is subject to a detailed scheme of demerger, which will be placed before the Board and shareholders for approval early next year, alongside the necessary regulatory and legal procedures.

The move follows a thorough evaluation process initiated in September 2024, when HUL's Board constituted a committee of independent directors to explore the separation of the ice cream business. Acting on the committee's recommendations, HUL announced its intention to separate the business in October 2024.

Growth strategy

HUL's Ice Cream business, encompassing iconic brands such as Kwality Wall's, Cornetto, and Magnum, has demonstrated steady growth and mid-to-high single-digit profitability. The demerger will establish the new company as a leading listed ice cream entity in India, enabling it to operate with focused management and greater strategic flexibility.

The standalone entity will continue to leverage Unilever's global expertise in portfolio management, branding, and innovation, ensuring it remains competitive in the dynamic marketplace. The Board emphasized that this structural change aims to maximize shareholder value while providing an agile framework for the ice cream business to realize its full potential.

The demerger is expected to unlock fair value for HUL shareholders, offering them the flexibility to stay invested in a growing segment. Additionally, it will facilitate a smoother transition for both the business and its workforce, as per the company.

HUL's management has been tasked with undertaking preparatory steps for the demerger, including drafting a scheme of arrangement. The company assured stakeholders of compliance with SEBI Listing Regulations and other applicable laws, promising timely disclosures as developments unfold.